I don't think there is much doubt that this raise was done for fear of Teva. It may be true that TEVA cannot possibly meet the FDA standard unless they cheat and steal MNTA's IP.
If MNTA is more worried now than before, I think, as evidenced by the lawsuit, is because they think that Teva may very well be closer to approval due to theft of IP.
A patent suit is not a perfect remedy, and in fact is often a benefit to the infringing party who makes more money from stealing the IP than from paying the legal fees and eventual penalty years down the road.
I think there is a legitimate risk of TEVA gaining approval through stolen IP. Which is perfectly consistent with Dew's opinion of the issue as Teva could only get approval through stealing the IP, and not on their own accord.
With the remedy of a patent suit, if Teva launches at risk, money in hand now will be very valuable. It would have been nice if they had raised while in the $20s, but how quickly the share price fell surpised us all, and I doubt the underwriters could have pushed the shares at the high price so quickly when buyers were noticing how rapidly the share price was falling.
The Bernstein note, coincidentally timed, sealed the fate.
All in all, if copaxone gets approved and the lawsuit on copaxone ends positively this 9% or so dilution will be long forgotten and nobody will care. But for MNTA management, if the worse case happens, they still want to make sure that MNTA continues as a viable entity, without having to scratch and scrape and layoff, and reduce their aspirations. So from their perspective, it is something they needed to do.
To me the raise felt like a slap in the face, but we have to face it, the primary party of interest in public companies is management. They are 100% invested in the company, whereas shareholders can get out in 2 seconds. From management's perspective it was a very prudent thing. I am really surprised they limited the raise to $56 million or so with that perspective.
Tinker
